Center for Industrial Progress

Energy and the Modern Hospital

The modern hospital is a great industrial achievement. Medical technologies found in hospitals have greatly extended both the quantity and quality of our lives. It is advancements in these technologies that allow medical professionals to replace worn-out joints, to maintain breathing and circulation while a patient’s organs lay exposed during surgery, or to use controlled nuclear radiation to diagnose and treat diseases such as cancer.

Patients rely on these medical technologies, which in turn rely on a large supply of reliable energy to function. As a nurse, I see this first hand. Without a constant infusion of energy, mechanical ventilators, heart-lung bypass machines, and incubators for premature infants would not have their life-supporting power. A 2006 survey reports that the average teaching hospital in Ontario, where I work, uses more than three times as much energy per square foot as the average suburban home.

Maintaining the carefully controlled environment that hospitals require consumes great amounts of energy as well. The physical vulnerability that injury, illness, or invasive medical procedures create in patients requires the elimination of natural conditions such as moisture, dangerous microorganisms, and the outdoors’ ambient air-temperature. Consequently, industrial-scale heating, ventilation, and air-conditioning systems, as well as intensive cleaning and sterilization processes, are required for the safety–and often survival–of patients.

The day that inspired me most to appreciate access to industrial-scale energy in hospitals was August 14th, 2003, when ours nearly lost it. I remember observing a patient passing through a computed tomography (CT) scanner when the room was suddenly consumed by total darkness as machines shut off, warning alarms rang, and a sense of catastrophe struck me. A blackout had hit Canada and the northeastern United States, resulting in the loss of 61,800 megawatts of power to over 50 million people. Thankfully, my patient’s mechanical ventilator was supported by battery power, and the hospital’s natural-gas generators allowed power to return moments later. But the power-failure did not come to a complete end until August 22 — eight days of gradual return to normal power use.

That a seasonal increase in electricity demand was a major factor in the blackout only goes to show our need for a large supply of reliable energy. Yet despite the energy shortages of 2003, newly-elected Ontario premier Dalton McGuinty went on to promise the forceful shutdown of Ontario’s coal power plants, and to subsidize the creation of “cleaner” natural gas power plants that charge three times the rate of “dirty” coal-generated power. More recently, McGuinty’s government introduced the Green Energy Act, which gives even larger subsidies to suppliers of wind and solar power, paying them up to 16 times as much for power as conventional sources.

These policies were motivated by the belief that “A coal-free Ontario will reduce air pollution and healthcare costs.” [http://news.ontario.ca/mei/en/2010/10/moving-ontario-from-dirty-coal-to-a-clean-energy-future.html]. Such claims ignore the massive role energy plays in health care, and the role affordable energy consequently plays in reducing health care costs. Banning a practical and economical source of energy such as coal increases the cost of energy, necessarily increasing the cost of operating a hospital–of transporting supplies, food, and medications to patients, and of providing the manufactured biomedical goods that patients depend on. Struck with increased energy prices, hospitals must either provide fewer of these services or cut costs elsewhere, such as through bed closures, surgery cancellations, and employing fewer doctors and nurses. Nowhere is it as clear as in a hospital that, as Alex Epstein writes, “every dollar added to the cost of energy is a dollar added to the cost of life.”

What about the supposed health benefits of reducing air pollution from coal plants, and the decrease in health care costs that could lead to? They pale in comparison to the cost of limiting energy production. Driving on unpaved roads contributes approximately 130 times the volume of the particulate matter that concerns “clean-air advocates.” Residential wood fireplaces contribute 65% more pollution than all the coal-power plants in Ontario combined. In other words, a summer vacation drive on dusty, unpaved roads to the campground, where you rely on an open wood fire out in untouched nature, is a greater risk to your respiratory health than all the coal-power plants in Ontario combined. It is restrictions on energy production, not side effects of energy production, that threaten the health of Ontarians.

The only entity capable of putting significant restrictions on energy production, in Ontario and elsewhere, is the government. And history consistently shows that access to energy is most plentiful when the government protects, not violates, property rights. Property rights in the field of energy production have been eroding ever since the formation of the electrical grid in the late 19th century, at the expense of energy producers as well as for their supposed benefit. In an example of the latter, the government failed to protect property rights from companies seeking the right of way to lay the original electrical cables in New York City. But cronyism such as bribing bureaucrats was necessary to gain access to the”public” property to create infrastructure. By the beginning of the 20th century, the proliferation of state regulatory-boards meant that the government almost completely controlled price and distribution of electricity in the northeastern United States.

Central planning of the electrical grid led to the economic and technological stagnation that central planning always does. Regulations preventing utilities from competing outside of small state-designated areas prevented the creation of an integrated electrical grid-system based on the real-time needs of consumers. Other controls led to perverse incentive structures that resulted in capital misallocation such as the building of too many plants in some areas and not enough in others. Such controls prevent electricity prices from rising and falling in harmony with supply and demand. These conditions are the very ones that made the electric grid ripe for large blackouts like the one in 2003.

Just as the violating of property rights limits access to energy, energy prices decrease when the government protects property rights instead. Through the 19th century, profit-seeking industrialists and investors used their ingenuity to dramatically increase the supply of energy, in turn decreasing its price. John D. Rockefeller succeeded in reducing the price of kerosene to a seventh of what it had been merely a decade and a half earlier. Shortly thereafter, Rockefeller’s kerosene-lighting industry was made obsolete by Thomas Edison’s invention of the light bulb and his conception of the electricity distribution grid. So began the rapid chain of energy innovation that industrial capitalism has brought us. If the McGuintys of the world had been around then to stop men like Rockefeller and Edison from competing and innovating, hospitals like mine wouldn’t have the energy to function on anything like the level they do.

Imagine if the energy industry today, instead of facing more restrictions than ever before, were finally liberated from the throttle of government. Energy would be cheaper, more abundant, more reliable, and far less prone to incidents like 2003’s black out. Hospitals would face decreasing, instead of increasing, energy costs, allowing increased use of present technologies while freeing up capital for other needs. We could invest more in developing new medical technologies that push the quality and quantity of human life to even greater heights. Nowhere than in a hospital is the life-giving power of cheap, plentiful, reliable energy more apparent, and there could be no greater boon to our access to it than freeing energy production from government suppression.